Sovereign Gold Bond Scheme

The Sovereign Gold Bond Scheme was announced in the Union Budget 2015-16, which has now been accepted. This scheme will reduce the demand for gold and the investment to purchase 300 tonnes of gold bars and coins every year can be put in gold bonds.

Gold demand in India is mostly met by imports. This scheme will help to limit the current account deficit of the country. The SGB will be released under the government’s market lending program for the period 2015-16 and beyond. The actual quantum of issuance will be decided by the Reserve Bank of India after consultation with the Finance Ministry. The risk of change in gold prices will be borne by the Gold Reserves Fund. This will benefit the government in reducing the cost of credit, which will be transferred to the gold reserves fund.